Enhanced Requirements for Developers on Money Laundering, Proliferation Financing, and Terrorism Financing

Introduction

The Singapore Government has been making concerted efforts towards strengthening its anti-money laundering (“AML“) and counter financing of terrorism (“CFT“) framework, particularly in the wake of several high-profile money laundering cases in recent years. To maintain Singapore’s position as a finance and investment hub of global repute, the relevant rules and regulations are being updated to keep pace with the changing landscape of financial enforcement. Most recently, these updates have also expanded to include measures targeting proliferation financing, further enhancing the robustness of Singapore’s financial crime prevention regime.

The real estate industry has received much focus with regard to money laundering (“ML“), proliferation financing (“PF“), and terrorism financing (“TF“) due to the potential for abuse in high-value transactions. In particular, developers are required to comply with a set of legislation, rules and guidelines governing AML/CFT. This framework has now been enhanced with heightened obligations, updated clarifications, and increased penalties.

With regard to legislation and regulations, the Anti-Money Laundering and Other Matters (Estate Agents and Developers) Act 2025 (“Amendment Act“) has come into force on 1 July 2025. This serves to amend the AML/CFT framework under the Estate Agents Act 2010, the Housing Developers (Control and Licensing) Act 1965, and the Sale of Commercial Properties Act 1979, as well as the relevant subsidiary regulations and rules (“AML/CFT Acts and Rules“). The amendments aim to, among others:

• • strengthen current penalty frameworks;
  • give effect to, and align with, the Financial Action Task Force’s (“FATF’s“) recommendations; and
  • clarify restrictions against convicted persons.

With regard to guidelines, the Urban Redevelopment Authority (“URA“) maintains a set of guidelines for developers of housing projects and non-residential projects which has been updated as of 30 June 2025 – the “Guidelines for Developers on Prevention of Money Laundering, Proliferation Financing and Terrorism Financing” (“Guidelines“). The latest amendments include:

• • The inclusion of PF in addition to ML and TF;
  • Update of definition of “international organisation Politically Exposed Person” (“PEP“) and enhancement of relevant due diligence requirements on PEPs;
  • Update and enhancement of requirements relating to customer due diligence (“CDD“) and enhanced CDD (“ECDD“); and
  • Details on complying with the requirement to file a Suspicious Transaction Report (“STR“) and with measures relating to financial sanctions.

This Update highlights the key amendments and what developers should take note of with regard to regulatory compliance.

Amendments to AML/CFT Acts and Rules

The Amendment Act was introduced in Parliament on 7 March 2025 and was passed on 8 April 2025. For more information on the amendments in the AML Act 2025, please see our earlier Legal Update on “Bill Passed in Parliament to Enhance AML/CFT Requirements for Real Estate Industry” here.

The key amendments that the Amendment Act effects on the AML/CFT Acts and Rules include the following:

1. Update regulatory regime to cover PF: The amendments update the AML/CFT framework to clarify that it also covers measures to counter PF (and not just ML and FT, as was previously the case). This brings Singapore’s framework in line with FATF’s recommendations, which has been updated to clearly set out the standards to identify, assess, and mitigate risks associated with PF.

2. Targeted financial sanctions: The AML/CFT Acts and Rules have been amended to require developers to perform prescribed measures related to targeted financial sanctions for “terrorism, terrorism financing and proliferation financing” (and not just “terrorism”, as is currently the case). Developers are already required to assess whether a purchaser is designated as a terrorist or terrorist entity under relevant lists or sanctioned by the United Nations. These amendments clarify that this also applies to purchasers who are on the designated or sanctions lists due to TF and PF (in addition to terrorism).

3. Restrictions against convicted persons: Persons convicted of ML, PF and TF offences, both domestically and overseas, will not be granted a housing developer’s licence. These amendments ensure that persons convicted of such offences, regardless of where they are committed, will be subjected to prohibitions against: (i) becoming a housing developer; (ii) becoming a substantial shareholder of a developer; or (iii) holding a responsible position in a developer or in substantial shareholders of a developer.

4. Due diligence on actual purchaser: Developers are now required to identify the person on whose behalf the purchaser of a property, who is a natural person, is acting and extend their existing screening requirements to that person. This serves to codify beneficial owner (“BO“) screening measures also practised by developers.

5. Identification of PEPs: The amendments clarify that developers are required to take reasonable measures to identify if a purchaser or BO is a PEP, and that PEPs include domestic and international organisation PEPs (and not just PEPs of a foreign country).

6. Increased composition: The amendments increase the maximum composition sums for housing developers to S$50,000 and allow compounding of selected offences with maximum composition sums set at S$50,000 (up from the previous S$5,000). Developers should be aware of the sharp increase in the potential penalty for breaches of the relevant AML/CFT and/or counter PF (“AML/CFT/CPF“) requirements.

7. Notification from Controller: Developers are now prohibited from entering into transactions with a person suspected of, or at risk of, facilitating ML, PF or TF, as notified by the Controller.

Amendments to the Guidelines

The URA Guidelines aim to provide guidance to developers on their AML/CFT/CPF requirements. It serves as a practical guide to the actual practices and policies that developers should have in place, and the CDD measures that should be taken, in order for developers to comply with the AML/CFT/CPF framework.

The Guidelines have been updated to be in line with the amendments set out in the Amendment Act. Some of the key changes are highlighted as follows.

1. Inclusion of PF: Previously, the Guidelines set out the measures required to mitigate the risks of ML and TF faced by developers. In line with the amendments to the AML/CFT Acts and Rules to clarify that such measures also cover the mitigation of PF risks, the Guidelines have been amended to insert references to PF where relevant.

The Guidelines also set out what PF entails: “the raising, moving, or making available of funds, other assets or other economic resources, or financing, in whole or in part, to persons or entities for purposes of weapons of mass destruction proliferation, including the proliferation of their means of delivery or related materials (including both dual-use technologies and dual-use goods for non-legitimate purposes).”

URA has highlighted that the inclusion of measures against PF should – in practice – not be new to developers, as they are already part of existing AML requirements, due to PF offences being ML predicate offences. Nonetheless, developers should ensure that their AML/CFT/CPF policies and CDD forms are duly updated to include references to PF, in addition to ML and TF.

2. Clarification of scope of due diligence to be carried out on PEPs: Previously, the Guidelines required developers to perform enhanced CDD (“ECDD“) when the relevant person in a transaction is, among others, “a foreign PEP, a family member of a foreign PEP or a close associate of a foreign PEP”.

The Guidelines have now been amended to clarify that developers must also assess whether the relevant person (including a domestic or international organisation PEP, family member or close associate of a domestic or international organisation PEP) may present a higher risk of ML, PF or TF. If so, then ECDD must also be performed. The CDD forms provided in the Guidelines (in particular, Form E on “Details of Politically Exposed Person(s)”) have been amended accordingly.

This amendment serves to extend the ECDD requirements over domestic or international organisation PEPs (as well as their family members and close associates), in addition to foreign PEPs. The definition of international organisation PEP has been expanded in the updated Guidelines and the definitions of domestic PEP and international organisation PEPs are provided in the updated Guidelines as follows:

• • • A domestic PEP is an individual who is or has been entrusted with any prominent public function in Singapore.
    • An international organisation PEP is an individual who is or has been a member of the senior management of an international organisation (including a director, deputy director or member of a board of the international organisation, or an equivalent appointment in the international organisation).

Developers should thus be aware that the ECDD measures do not apply only to foreign PEPs, and that they should ensure that their practices and policies include identifying whether the relevant person (as well as their family members and close associates) is a domestic or international organisation PEP. If so, the developer must assess whether the relevant person presents a higher risk of ML, PF or TF, and thus warrants ECDD.

3. Details on implementing policies, procedures and controls (“IPPC”): The Guidelines require developers to develop IPPC to manage and effectively mitigate the ML, PF and TF risks identified or notified by the Controller in writing. This includes:

• • • making appropriate compliance management arrangements, including the appointment of a compliance officer at the management level; and
    • applying adequate screening procedures when hiring employees.

The updated Guidelines make the following clarifications/additions to the IPPC requirements:

• • • The updated Guidelines provide that a compliance officer at the management level includes a director, Chief Executive Officer, or Chief Financial Officer.
    • The IPPC should also include the scope and frequency of the developer’s training programme for its staff.

With these amendments, developers should review their IPPC to ensure that it includes the details of the staff training programme, and consider whether their appointed compliance officer qualifies as “management level”.

4. Reasonable measures: The Guidelines set out the measures that must be performed as part of CDD and ECDD. The updates serve to include an additional measure to carry out “reasonable measures” under both CDD and ECDD: 

• • • For CDD, developers must take reasonable measures to determine whether the purchaser or a natural person on whose behalf the purchaser is acting, is a PEP or a family member or close associate thereof.
    • For ECDD, developers must take all reasonable measures as are appropriate to the risks of ML, PF or TF in relation to the relevant person.

The inclusion of these catch-all requirements relating to “reasonable measures” indicates that developers should not restrict themselves to the measures specifically set out in the Guidelines as part of CDD or ECDD. Developers should be aware of the risks of each transaction arising from the specific circumstances, and take precautionary steps as necessary to address the specific risks.

5. CDD for sanctions lists: As part of the measures under CDD, the Guidelines provide that where screening of the relevant person results in a positive hit against sanctions lists and lists as informed by the Controller (or other relevant authorities), developers must decline to enter into any transaction or terminate any transaction entered into with the purchaser and file a STR.

The updates provide further details on what must be done when encountering a positive hit. In addition to the above, the developer must:

• • • not grant an option to purchase any unit to the purchaser, accept any money from or on behalf of the purchaser, or enter into a sale and purchase agreement with the purchaser or assignee purchaser for a unit; and
    • cease all dealings with the designated persons and entities and, where applicable, freeze the funds or assets and not refund any part of it, pending further instructions from authorities.

The amendments clarify that, when declining to enter into a transaction with a purchaser on a sanctions list, the developer cannot accept money from the purchaser, including any booking fee. The amendments also clarify that, when terminating a transaction with such purchaser, the developer must freeze the relevant funds or assets, including the purchase price paid, without prior delay or notice. This serves as a confirmation on how developers should treat funds from purchasers in the context of sanctions lists.

6. CDD on existing purchasers: The Guidelines provide for CDD measures for existing purchasers (purchasers with whom developers have entered into a transaction before the implementation of the prevention of ML/PF/TF requirements). Under the updated Guidelines, if the existing purchasers originated from or are residents of high-risk countries or jurisdictions on the FATF black list, the developer should perform enhanced ongoing monitoring of the transaction. This could include more frequent checks on the source of wealth and funds, payment patterns, etc. 

Developers should note that CDD obligations do not only cover new customers. The existing customer database should also be reviewed against the FATF black list to determine whether ECDD is required.

7. STR timeline: The Guidelines provide that if there are suspicions that ML/PF/TF activities are committed, developers are required to file a STR. While the Guidelines previously did not provide a specific timeline, the updated Guidelines sets out the following details on when an STR must be filed:

• • • The filing of an STR should be done as soon as possible, which should be within 5 business days after suspicion was first established, and within 15 business days of the case being referred by the developer’s staff, unless the circumstances are exceptional or extraordinary.
    • In cases where the relevant person or person acting on behalf of the purchaser is a sanctioned party, developers should file the STRs immediately, no later than one business day after suspicion was first established.

8. Targeted financial sanctions: The Guidelines provide that before granting an option to purchase or entering into a sale and purchase agreement with a purchaser or assignee purchaser, developers must take reasonable measures to assess whether the relevant person or any person acting on behalf of the purchaser is subject to targeted financial sanctions. The updates specify that this includes “a person suspected of, or at risk of, facilitating ML, PF or TF who is specified by the Controller in any written notice issued by the Controller”. If the developer has reason to suspect that a purchaser is subject to targeted financial sanctions, the developer is prohibited from granting an option to purchase, accepting any monies (including booking fees) or entering into a sale and purchase agreement with such a purchaser and is required to file a STR.

Concluding Words

With the amendments to the AML/CFT Acts and Rules, as well as the updated Guidelines, developers should review their practices, policies and forms to ensure that they are in compliance with the new requirements. Although a number of the amendments are clarificatory in nature, or serve to codify existing AML practices, developers should still ensure the inclusion of the specific terminology in the amendments. Developers should also be aware of the additional CDD and ECDD obligations introduced and implement the necessary measures.

For further queries on these issues, please reach out to our Team members set out on this page.

For more information, please see the following links:

• • URA Circular on Enhanced Requirements for Developers against Money Laundering, Proliferation Financing and Terrorism Financing
  • Anti-Money Laundering and Other Matters (Estate Agents and Developers) Act 2025
  • Guidelines for Developers on Anti-Money Laundering and Counter Financing of Terrorism